Beer Apocalypse – Europe Braces for Barley Shortages

Europe’s barley crops get baked

Thanks to last minute rain Europe’s hop crops appear to have survived this summer’s hot and dry weather, but their barley, the backbone of beer, may not.

Here’s the deal…

According to Bloomberg barley crops in northern Europe have fried in the unseasonable hot and dry weather that has plagued the continent this summer. Yields in key barley producers in Scandinavia, northern Germany and the Baltic countries could be as much as 30 to 40 percent below normal, according to trader Evergrain Germany.

Barley prices are already rising in Europe and more times than not, those price increases make their way to the beer consumer.

In Scandinavia, exceptionally hot weather, has spread wildfires across Sweden, but it’s also led to barley harvests that are three to four weeks earlier than usual. And for the first time in eight years the European Union is facing malting barley shortage of 490,000 metric tons this season, according to RMI Analytics.

French malting barley prices are now at the highest they’ve been since 2013 and have spiked more than 35 percent since April according to data from Commodity3.

Heineken cited higher commodity costs in their recent Q2 announcement. And while the world’s second-largest brewer suggested that the poor European harvest wouldn’t hurt its 2018 results, it declined to comment on the impact going forward according to Bloomberg.

And because EU spring barley production could be 10 percent below the five-year average, professional maltsters that extract malt from barley, are expected to pay much more for high-quality grain or change their formulation processes.